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Updated over 13 years ago on . Most recent reply

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Marian Smith
  • Real Estate Investor
  • Williamson County, TX
960
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1,855
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appropriate discount for foundation issues on REO

Marian Smith
  • Real Estate Investor
  • Williamson County, TX
Posted

There is a REO listing agent who hires a local structural engineer to do a slab report on apparently any listing with cracks in the drywall. The listing then includes a report that typically measures slope of slab, shows what type of pier placement would remediate slope and states that the superstructure is okay.
That basically eliminates all retail buyers from the get go. So what is that worth? The elimination of retail buyers, I mean.
If your only pool of buyers is one with "buyers with the money to fix a foundation at 15k" and holding costs of over two months due to backlog of drought damaged foundations in area and a reserve to cover the broken pipes, etc which happen when moving a cement slab? And the inclination to take the risk?
What is a reasonable premium to expect the bank to pay you to take it off their hands? How do you come up with that number or do you just decide what it is worth to you?
It has got to be worth a much bigger discount than an ordinary beat-up property as people seem to be very spooked by slab issues.
And also, does a house on a "fixed" slab carry a stigma when reselling?

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